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“Neo-liberalism” has become an excuse by many who self-identify as left-wing to avoid confronting the reality of capitalism as the source of economic stagnation. It’s as though a return to Keynesianism is some kind of answer. There’s nothing new in this situation, as leftists influenced by Marxism have always rejected social democratic (in the sense of labour parties) efforts to keep the zombie system alive.

The following article is a good one for making this point but also for discussion and debate.

There’s a basic article of faith in leftist thought, held especially dearly by most among the U.S. left. It is so entrenched and so seldom challenged that it has attained the status of myth, an unquestioned origin story on par with the Book of Genesis, as the latter must have been regarded within Christendom during the Middle Ages.

The myth goes like this: During the 1980s, Ronald Reagan and Margaret Thatcher, two arch right-wing and highly potent politicians, rose to power in their respective nations, the U.S. and the U.K. They thereafter began to institute what was for the vast majority a vile and destructive political and economic scheme: “neoliberalism.” Previous to the instalment of this neoliberal scheme, the working class had experienced relative economic improvement, and capitalists seemed happy too (as if we care). But suddenly, and seemingly without cause (although the failure of Keynesianism was apparent in the unprecedented stagflation of the 1970s), these evil political twins, prompted by wizards who formalized the approach, introduced the nefarious ideology of neoliberalism to the world. As cruel and heartless representatives of the capitalist class (which, indeed, they were), they and their supporters caused the Fall from the supposed Paradise of Keynesian reformism that had preceded them. In this mythological version of reality, neoliberalism is understood merely as a set of essentially unwarranted and unusually brutal policies, an ideological and political formation that was hatched in the brains of evil masterminds conspiring in right-wing think tanks, concocted to dupe and punish the vast majority for the benefit of the rich and powerful.

This narrative sounds cartoonish or religious in character, but only because it is – not because I have made it so. It is a typical leftist personification of world-historical forces in lieu of an actual analysis within political economy. It amounts to what I have elsewhere called “political reductionism,” which is similar to whatAndrew Kliman has referred to as “political determinism.” Kliman describes political determinism as such: “They [Keynesians and social democrats] think that the capitalists [and/or their political representatives] control capitalism––not the other way around––so that the system can become something it’s not once different people with different priorities assume control of it.” Thus, if only such people as Reagan and Thatcher had never been elected, or better yet, had never been born …

The mythological version of neoliberalism is invoked daily, and most recently in response to such events and political developments as Brexit, Trumpism, and the unprecedented political (albeit thwarted) success of the “socialist” Bernie Sanders. According to journalist Glenn Greenwald, the “leave” outcome of the Brexit referendum registers what should be an expected response to decades of neoliberal policies foisted on the masses by the EU and the British political elite. Along the same lines, Michael Hudson argues, “the whole withdrawal from Europe means withdrawing from austerity… The rejection of eurozone austerity is, essentially, a rejection of the neoliberal plan that the TTIP is supposed to be the capstone of.” Similarly, in the U.S., the appeal of Donald Trump is due at least partially to his feigned and misleading championing of U.S. working-class interests, a working class which, Trump suggests, has been made redundant by lopsided and globalist trade deals and outsourcing/off-shoring, and reduced to the precarity of part-time and/or Uberized piece-meal work or permanent unemployment. As Trump, Sanders, and the left blogosphere see it, these dire consequences are all due to the choices of neoliberal politicos, especially Reagan, the Bushes, and Bill and Hillary Clinton. Indeed, Bernie Sanders’s entire presidential campaign can be summed up simply as: “just say no to neoliberalism.” The “political revolution” that he heralds effectively amounts to a reversal of neoliberal policies and their replacement by progressive ones. According to Sanders, the entire economic fiasco that we have been enduring has been the result of a series of political and policy decisions that have been disastrous for working Americans.

What’s the problem with this narrative, you ask? After all, didn’t Reagan actually begin the defeat of unionism with the breaking of the Professional Air Traffic Controllers Organization’s strike on August 5, 1981, thereby effectively inaugurating the long period of neoliberalism that we have been enduring ever since? Didn’t Bill Clinton, the arch neoliberal Democrat, sign NAFTA into law in 1993, a trade agreement that eviscerated labor and environmental protections, while costing millions their jobs? Didn’t Clinton also repeal the Glass–Steagall Act in 1999, thereby supposedly eventuating the massive financial crisis of 2008, the effects of which we are still reeling from to this day? In short, didn’t political agents actually institute neoliberal policies, policies that continue to disenfranchise and oppress us? And shouldn’t we elect as President someone like Bernie Sanders, Jill Stein, or another leftist, who would reverse these policies? Finally (this part of the story is optional in some circles), hasn’t the capitalist class made a killing over the past forty-plus years, while they simply ignored (or some may say, enjoyed) the stagnant wages of the vast majority, the widening gap in income, and the rising tide of poverty? Isn’t there a huge and growing pie from which the majority simply have been excluded to a greater and greater extent? In the short term, don’t we simply need to get a bigger slice and then (perhaps) talk about the whole pie later on?

The problem with this story is that while grossly exaggerating the impact of policies and trade agreements, it excludes a key underlying and primary causative factor of the current instability and malaise. This key factor is necessary not only for diagnosing but also for addressing the conditions that we face today. Keynesian reformers and social democrats, including Bernie Sanders, are either utterly unaware of, attempt to blithely ignore, or otherwise contest this factor. But its existence and effects are undeniable and its implications are enormous. That is, excluded from the standard leftist narrative of neoliberalism is the following: the underlying, decrepit state of capitalism over the past forty-plus years, and the unlikely prospects for a return to robust economic growth in the foreseeable future.

Few thinkers, even among Marxists, seem willing to tell the working class this fundamental fact, and it surely is not going to be acknowledged by major political office holders or campaigners, whose careers depend upon the belief that their particular nostrums or plans will remedy the crisis. Yet neither Trump with his protectionism nor Sanders with his so-called socialism can restore the economy (in the U.S. or beyond) to post-war levels of growth, the kind of growth upon which their promises depend. Likewise, their policies and plans would not ameliorate the conditions of the vast majority. As long as the economic system is capitalism, profit will be the driving factor, and the predicament of capitalism has precisely to do with a loss of confidence in the profitability of investment.

In 1973, an already sluggish world economy bore the immediate effects of the oil-price hike. Although the rate of profit temporarily rose as a result of the inflation brought about by the rise in the price of oil, it resumed its longer-term downward trend after a few years. That trend has continued, with spikes and dips in the interim, to this day. Marx’s law of the tendency of the rate of profit to fall had always been in effect since the inception of industrial capitalism, but since this point in history, insufficient countervailing factors have been available to offset the tendency. Because profit is the driving force of capitalist production, the only incentive for undertaking it and the only long-term source of funds for productive investment, we face unstable and grim economic conditions and prospects. Given the low yields in profit, an effective productive investment boycott has ensued, and since the mid-70s, the worldwide rate of growth has been approximately halved. While there have been relative booms and busts in the interim, these have been due largely to short-term, financially-driven bubbles, and perhaps the introduction of new markets and newly super-exploited labor forces. Nevertheless, the economy has never returned to post-war boom levels.

The decades after World War II and those after 1975 reveal strikingly different situations for the world economy, and thus utterly different prospects for Keynesian or social-democratic interventions. Since the mid-70s, as Kliman notes, “the rate of investment (capital accumulation) has fallen and never recovered, debt burdens have increased markedly relative to income, growth of GDP, industrial production, employees’ compensation, and public infrastructure investment were all much slower than during the postwar boom, the average duration of unemployment was higher and the problem of workers dropping out of the labor market was more serious, and there were many, many more burst bubbles and banking, debt, and currency crises.”

Ignoring or blithely unaware of this economic reality, leftists mistakenly imagine that “neoliberalism” has merely been the desideratum of wicked politicians, who under the influence of their Wall Street and corporate donors, have maliciously manufactured current economic conditions. But the reverse is actually the case; neoliberalism is a set of policies and an ideology that the ruling class and their political proxies developed in response to the underlying and enduring economic malaise of capitalism. That is, underlying economic conditions have been the driving force of neoliberalism, not politics and ideology. And neoliberalism has not solved the problems that it inherited from Keynesianism. Indeed, history has illustrated time and time again that the various rightist and leftist reformist political or policy programs formulated to resolve the problems produced by capitalism are inadequate to the task.

Unfortunately, for sundry reasons, what has happened in the ideological ambit of left politics amounts to a divorce, a divorce of the “political” from the “economy” in the field of political economy. Rather than the so-called “vulgar Marxist” economic determinism of yore, what we have today has been aptly termed political determinism. Political determinism is the belief that the economy is driven by politics and ideology, rather than the other way around. As long as political determinism prevails on the left, the left’s vision will be myopic and its recommendations will be utterly flawed and useless. Isn’t it about time to tell the working class the truth?

“In making these arguments we redraw the borders, from political demarcations of territory, to political demarcations between those who benefit from capitalism and have an interest in it being maintained, and the vast majority of us who do not”

The following ‘open letter’, which Spiked declined to publish, is republished with permission of Marxist-Humanist Initiative. I’m not all that interested in the question of whether Spiked should or should not publish the letter – Spiked campaigns for Brexit – but I like the points made by the writer, Chris Gilligan, in disagreement with Spiked.

* * * *

Popular sovereignty requires vigorous debate – Chris Gilligan I wrote this open letter as a contribution to the vigorous debate that Brendan O’Neill and Spiked claim that they want to promote. I think that O’Neill’s refusal to publish the open letter suggests that Spiked’s commitment to free speech and rigorous debate is bigger on rhetoric than it is on substance. Read O’Neill’s editorial, then read my criticism (below) and decide for yourself.

Open Letter on Spiked‘s ‘Leave the EU’ campaign

by Chris Gilligan

Dear Spiked,
I see that you are campaigning for the United Kingdom (UK) to leave the European Union (EU). According to an editorial by Brendan O’Neill Spiked are urging a Brexit on the grounds, (‘which trumps all of those reasons to stay, and trumps them hard’), that the EU thwarts ‘popular sovereignty, the crucial right of a people to consent to the political system they are governed by’. O’Neill tells us that we should vote to leave if we ‘think people should determine their political destinies’, if we ‘are optimistic about the future’, if we ‘prefer the adventure of uncertainty over the dull predictability of expert-delivered diktats’, and if we ‘prefer politics to be lively and unpredictable rather than paper-pushing and aloof’. All of this sounds great. But, and this is a BIG but, how is a vote to leave going to achieve any of these things? The reality is that a Brexit is not going to reinvigorate democracy in the UK.

The EU referendum has not come about because of any popular agitation. There is no popular demand for a Brexit, and no popular desire to remain in the EU. The EU referendum has come about because of machinations within the Conservative Party, fuelled in part by the rise of the United Kingdom Independence Party (UKIP). This elite concern regarding the EU is not because of the anti-democratic nature of the EU or its disdain of ordinary people, the political elite in the UK (from all the main parties) share this disdain and have for years been busying themselves with eroding democracy in the UK. The EU is not the problem, it is symptomatic of a deeper problem, which O’Neill acknowledges when he says that ‘The EU both expresses and expands the 21st-century crisis of democracy’. Taking sides in the referendum implies that the EU is the problem, rather than a symptom.

If we take the example of migration, arguably the one issue on which there has been some popular engagement with the referendum debate, we can see that the UK has done much more than the EU to stifle debate on this issue. Spiked Deputy Editor, Tom Slater, partially acknowledges this when he says that ‘immigration policy is the sharpest expression of the anti-democratic sentiment of European elites. This is particularly keen in the UK, where New Labour’s relaxing of the borders in the 2000s reflected not only an open contempt for popular sovereignty, but a barely veiled disgust for the blob-like demos itself’. The UK, not the EU, has been at the forefront of an anti-democratic approach to immigration. The New Labour government did display open contempt for popular sovereignty. Blair, Mandelson and the other career politicians of New Labour consolidated the anti-democratic internal operation of the Labour Party and treated the electorate as passive fodder who only needed to be mobilised at election time. They continued the trajectory, begun under Margaret Thatcher, of moving ever increasing areas of public life outside of the realm of public accountability.

Slater is too one-sided when he says that New Labour relaxed the borders in the 2000s. What they did was relax immigration controls for specific kinds of immigration, principally labour migration, while they toughened them for asylum-seekers and others who were deemed ‘illegal’ or unproductive. They introduced immigration controls that operate on the basis of encouraging those who would bring an immediate monetary benefit to the UK and deterring those who were deemed to be a potential burden to the public purse. New Labour initiated the policy of ‘managed migration’, (which continued under the Con-Dem coalition and now under the current Conservative government), in an attempt to treat immigration in a technocratic manner. It was designed to depoliticise the issue of immigration, not to make it into a political issue. The Conservatives have continued this ‘managed migration’ approach, but argue that in the context of austerity the UK does not have the capacity to absorb as many labour migrants as previously.

Slater is correct when he says that ‘if we want to open the borders, we need to win the argument first’. Where, however, is the radical, progressive argument in favour of open borders? Slater doesn’t provide us with an argument. During the ‘migrant crisis’ of 2015 and 2016 members of the public signed online petitions, sent money,visited the camps in Calais, joined protests, and even offered shelter in their own homes. These are actions that involve more than simply putting an X on a ballot paper. What has Spiked had to say about these examples of popular sovereignty in action? They have been disparaged as exercises ‘in charity and public empathy, rather than a political issue about freedom of movement and human autonomy’. Protestors have been told that if they ‘want to help refugees’ they should ‘stop sobbing’. These arguments from Spiked read like barely veiled disgust for the demos, not like arguments for open borders.

Spiked is for open borders, but …. As Brendan O’Neill put it in September 2015: ‘spiked is about as open borders as you can get. But in Europe right now, there is a bigger problem than border control, and that is the cynical weakening of national borders, and of the popular sovereignty within those national borders’. This is an evasion of the difficult arguments. It is easier to rail against the bureaucrats in Brussels than make the case for open borders. It is easier to be cynical about the limitations of popular expressions of human empathy, than to engage with this empathy to make the case for a human-centred world. Spiked never engages with the difficult arguments on migration. What do we say to people who feel the harsh grind of austerity measures when they say that we can’t take in refugees because there is not enough to go around? We need to challenge this culture of limits, not by arguing for capitalist growth, but by pointing out that it is not immigrants who are responsible for austerity. We need to challenge the idea that there is not enough to go around and instead ask why the vast wealth that capitalism generates does not trickle down to the vast majority of society? In making these arguments we redraw the borders, from political demarcations of territory, to political demarcations between those who benefit from capitalism and have an interest in it being maintained, and the vast majority of us who do not.

Instead of recommending a vote to leave, it would be better to focus on the substantive issue and use the opportunity to argue for open borders, regardless of whether we are in or out of the EU. A more radical and progressive approach to the referendum would be to engage with the desire of the mass of people for a better world and repose the issue. Calling for the UK to ‘Leave’ only lends legitimacy to the elites’ pretence that the EU is the substantive issue.